that of course has flipped the the majority being patrolled by the republicans with a slight of 49 votes. in the senate and 101st congress in 1990, there were 55 democrats and 45 republicans. that might sound familiar. that will also be the makeup of the next congress. and of course the republicans in the white house. those that like to focus in 1990 when 26 republicans and administration officials were sequestered away at andrews air force base. those that supported and staff to the negotiators would recall

this is pretty much before cell phones, lap tops, defiantly before blackberry and iphone but the food was good. the time it had ended sooner if it wasn't so good before prime rib night rolled out. on monday night we had prime rib and left andrews and gary anderson at omb who would speak i guess for the departed mr. gorman was so and entrepreneurial that he developed t-shirts that reflected our participation. and i think that he has the actual access admission to that place. but it was those 11 days out at

andrews that began in may of that year stretching from the conference room at the white house and over to the converted officers or at andrews air force base and finally to a conclusion in the speaker's private dining room in october. the speaker will be here very shortly. and will present his views on this. but along the way, there was fear of an economic disaster. they were raised if the scheduled sequester was triggered at that time and the sequester add that time as estimated in october 15th, 1990 there would be a 30% reduction in defense spending and a 35% reduction in the non-defense

triple the size of the sequester that faces the country this year in january. at the same time, the deficit for fiscal year 1991 increased in the president's budget summation in february when it was submitted for that year -- yes, sir? >> can i ask you said the sequester order was 31%. >> yes. >> where did it come from? >> did they have a sequestered? >> it grew out of the original holland's 1985 legislation that we adopted it was estimated $100 billion of the end of 1990 had increased nearly $300 billion by the end of 1990 with saddam hussein invading kuwait on august 2nd and the first gulf war. these gentlemen were there.

they participated in this long arduous debate. the debate came up to something that is extremely familiar to everyone in this office in this room and that is taxes and spending. more specifically the desire of the president as understand, governor, was to have a capital gains tax cut. but the democrats will only agree the overall rates were increased no such agreement could be reached and democrats retreated on the rate increases while selling for a limitation of tax deductions for higher income. i will give the recollection of the 1990 budget its pros and cons but more importantly what lessons from that experience can be applied today. i'm sure they will want to

interact with each other. after opening comments you want to make and if time permits we will certainly opened up to you and the audience for any specific questions you might have to be i'd like to speak with the honorable former chief of staff at this time mr. sununu. welcome and thank you and we look forward to your views. >> thank you very much. [laughter] >> i think this is a very interesting coincidence in history and time to have us here discussing the 1990 budget

agreement in what is happening today and i want to write from the beginning acknowledge what i believe was the very instrumental leadership role of the folks like speaker foley and the senate leader george mitchell and bob michaels who was the minority leader in the house there's no question of this could have happened without them coming to the table and understanding how important it was to achieve the result. but i also have to emphasize what i believe is the fundamental katulis and that that is a president who was determined to solve this issue. absolutely, unequivocally determined. and as we see not only was he willing but he ended up in my opinion sacrificing tremendous political capital in order to do

what he felt the country needed at that time there are a lot of folks that like these agreements to take place in a climate where there is no politics. it will never happen. it will never happen because politics is the cement that holds the system together, not what divides at. in my opinion there are three political aspect that have to be looked at in what happened in 1990 and certainly have parallels to what is going on today. does the politics of the differences in philosophy. they're certainly is a liberal perspective general the attributed to the democratic party, a conservative perspective attributed to the republican party their differences and basic philosophies there is nothing wrong with having differences and commitments to different philosophies.

and then the second slice of that is the detail the differences within the subornation of the principal philosophies and to a great extent in negotiating a budget agreement we have to understand those internal party differences are the details that are absolutely important in coalescing and creating and crafting a majority that can allow something to take place and there's nothing wrong with those and that's the politics of personal agendas. i will not credit that third one with the point that they made on the other two. sometimes there is a great deal wrong with that aspect of politics. but all three of those are in play today. all three of those were in play in 1990. to make great extent, the

president's commitment was certainly triggered by the sequestration obligations that followed under gramm redmon hollings but i think it's an important historical note for me to emphasize there was a meeting in the white house in the spring of 1990 and which nick brady the secretary of treasury invited a number of the central bankers who were in washington for some of the international banking meetings to come to the white house for the reception and that is the president heard of the serious concerns of the financial community around the world that the committee needed to have a multi-year five-year preferably but followed on what gramm-rudman hollings had done

and provided the framework for stabilizing the financial situation in the u.s.. so the president of a believe after the spring meeting really resolved to provide the leadership to make this happen. we talked about the time line that started with a meeting in may with the president invited congressional leaders on to the white house on may 10th and we started with an initial negotiation on may 14th. some of the process really took a little bit less than six months from the time it was triggered in the white house to the time the little station was signed. that may sound like a long time but considering how long we have been struggling over our recent battles, it seems now with a little bit of hindsight to be fairly efficient in terms of that process.

i would like to talk a but more in detail about the fact that there were two agreements. because the fact that there were two agreements, the reason for them, the way they were achieved and the implications of the two agreements really have a great deal of information and a great deal of lessons if you will to understand how to do and perhaps how not to do what we need to accomplish in the current climate. an initial agreement was achieved which meant. more importantly, in the process of working with the republican members of congress the president had directed me to make sure that we understood what republicans and house and

the senate felt were required for them to support the agreement in particular the most fundamental issue was that there would be no increase in tax rates familiar point if you read the headlines in the paper today. the republicans in the house and the senate say they do not want to increase the tax rates. secondly, they're had to be two or three to one, actually at that time we started we were talking three or 43 period one in the cuts in spending to the revenue by whatever we did on the tax and fees side. in that process, we set up a procedure on the senate side with senator phil gramm, and

certainly he was in close communications obviously with bob dole and pete domenici and other members of the republican side that cared about the budget. and on the house side, he asked us to deal with new gingrich so i had an informal arrangement with both new gingrich and gramm that we would run the process for them and they would participate in the negotiation but when we got to the point we felt the president was willing to compromise on issues, we would run that process through them. the first agreement was achieved. and as it has been noted, had no increase in tax rates. no increase in tax rates. the additional revenue was generated by mostly consumption taxes on gasoline, luxury taxes.

there were additional revenues specifically fenced off for social security which were i believe produced by increasing the payroll tax. there were additional revenue is fenced off for medicare by extending the cap on medicare and that time medicare had a cap but all of the other taxes that were in there were primarily related to use or consumption. it met the criteria established by the republicans in the senate and the republicans in the house. we presented that to the committee as a whole, to the participating members of the republicans that were participating in the process on the house and the senate side as a whole, and i have a specific conversations with both gramm individually and gingrich individually, and it was agreed that we had met the criteria.

i am not positive of the numbers, but i believe it was something like 375 or $380 million in cuts, and 120, 125 million in revenue in the first package. roughly 3-1. the white house was under the assumption that this was acceptable. as part of the process agreed to it. the president goes out. we sat down with the democrats and confirmed to them we had a deal. tom foley and george mitchell went back to their much larger dabble. the larger gaggle of the members of the house and the senate and finally, the leadership in congress from the democratic leadership in congress, the republican minority leadership

in congress, and the president agreed we had a deal. that went to a vote. in between the was the way to go to a vote and in that process we began to hear rumbling. some of the more conservative members of the house led by the speaker were uncomfortable with the package. we could never identify what specifically they did not like. the comment always came back it had taxes but everybody knew in the beginning after the initial process started that there would be a balance between revenue and spending of roughly 3-1. everyone was invited to the rose garden. i think history has documented the fact that new gingrich came to the meeting. everyone thought he was going to join in the rose garden and he did not.

the president announces the agreement. it goes to a vote i believe in early october and is defeated by a coalition of conservative republicans and liberal democrats. the president is committed to have a package. we sit down again this time recognizing that we probably have to negotiate a package that is more favorably inclined to the democrats because there is no way we can get less taxes if you will then we got in the first package. we negotiate an agreement which in my opinion was far less good than the first package. the new agreement did touch tax rates. in fact it shifted i believe about $30 billion of a savings. if $30 billion from the spending

side to the revenue side so that the final numbers i believe look like 350,000,000,140 to 140 billion in revenue. roughly 2.25, 2.5 ratio. but we did have to yield on tax rates today in exchange for that, we did get a cap on capital gains at 28%. let me talk a little bit about the tax rate side because i actually think that even the change in tax rates hasn't been well historically. the rates at the time i believe were the low-income rate of 15% if you will come and the middle range, 28%, and then that extended out to what we now call wealthy. but on top of all of that, there was a bubble in the middle and

everyone forgets about the bubble in the middle that was really a middle class tax rate. it was 33%. and millions upon millions of americans were significantly affected by that rate. when we negotiated a change in the 28% of wealthy and raised it to 31, we were able to reduce the 33% to the middle class down to 31. and so, we now have a system of 15, 28 and 31. i stress that because now with everyone arguing about the fact that their rates are critical issues to look at, that budget agreement which was so maligned actually cut the rate on the middle class from 33 to 31.

now, i believe there is a plan that came out of the budget agreement of 1990 that isn't talked about enough beyond the points that i've raised here and that is the critical nature of the budget enforcement act which was part of that. as part of the agreement to talk about revenue at all the president insisted and we were able to negotiate an agreement that provided a piece of legislation under which the congress would budget spending and revenue in the future post this agreement and that was the budget enforcement act and it had built into it very specifically and very deliberate pay-as-you-go rules that said if he wanted to spend, you had to identify how the spending was going to be covered. with all due respect to my

friend, president clinton, and gingrich who had been running around in recent years patting themselves on the back for having generated surpluses i truly believe that the surplus of the 90's what tv coverage generated by the agreement that came out of what tom foley and george mitchell and bob michael and bob dole and especially george herbert walker bush did with the budget enforcement act which required those budgets to make sure that they did not spend more than they took in and i think the surpluses of the 90's were the best legacy if you will of the budget agreement of 1990. thank you, governor. >> let's turn to my old boss, the former chairman of this particular committee, and by the way, a little fact, he will remain in history as the longest

serving chairman of this committee because of term limitations replaced after his departure. so, senator? >> thank you, bill and governor sununu for your interest in remarks. it's interesting to see how things are similar how the response in the action of the congress is different back then compared to now. first i want to say to all of you my voice is not as good as it used to be. they tell me i still have a hope of it coming back and my recollections it isn't as good as it used to be. so, i am not going to contribute as much by way of things that only minor brain remembers in these events because some of that would be absent if that was

the case but i do want to say that i think this is an exciting thing to do. and for the participants, i hope you will finish it. i hope you do put down what happened now, what happened then, what happened now, and what the budget plan years in the congress actually did. i regret to tell you that i have one additional reason for you to put it down this time because contrary there is a chance we will not only falloff of the cliff but break the bank that of the monetary policy of the world of wargo upside down with it.

i don't believe that the players get it. i think they are so besieged by information they don't think there is a chance that this enormous deficit or debt no matter how it is enormous because there is no chance anything serious what happened to america. i am not of that opinion that think there is a chance something very, very bad is going to happen this time. now, i want to thank you the governor and the speaker when he arrives if he arrives in by understand if he does not. my first reaction in the 1990 budget, the first reaction is it was a failure largely because of the goal of turning a to enter a billion dollar deficit in 90

into a projected surplus in '94 was not achieved by the agreement. and in fact when the deficit stood at over two entered billion. when i supported the final omnibus budget reconciliation act the president signed into law in november of 1990 to implement the agreement and the issues that we confronted on the entitlement spending were really not addressed but rather find an agreement that is largely reached out of exhaustion and convenience. bringing the debate to a close in the congress for the midterm elections that was the reason. those issues and no surprise remain even today and the revenues they were not solved then and they've been on the

course returned again to dominate our current debate. i must also know that 500 million-dollar deficit reduction that we agreed to back then in two-thirds was on the spending side, and one third was from the increased fee and revenue. those savings and spending nearly $200 billion came from putting caps on discretionary spending primarily defense spending is very small percentage actually can from addressing the entitlements less than 10%. i want to make sure that the senator acknowledges there was no defeat to get the enforceable caps. they were considered to be just another procedure but david turnout for a while as an obstacle to the overspending. looking back we had -- had we

been polled on the fundamental changes in medicare and medicaid and social security, we might not be experiencing the problems that we taste today with these unsustainable program costs. as a republican, i of course was also disappointed with the 1990 agreement may have been a contributing factor with president george h. walker bush being a one-term president. my second reaction is that the 1990 budget agreement did demonstrate that even in a divided government conagra's and congressional leaders of both parties could come together with an agreement to avoid the pending 40% sequester and enact legislation would reduce the growth and spending and raise

taxes that in today's dollars would be the equivalent of $1.8 trillion over a ten year period. also on the positive side, some will disagree the 1990 budget summit did put in place an enforcement procedure that takes deficit targets for the caps on discretionary spending as i've indicated and the correct government concept development the chairman puts forth and i was also disappointed in the 1990 budget agreement that may have been a factor as i indicated. i believe those procedural changes did help limit the deficit spending and help lead to the 1993 and could lead to the balanced budget act of the

century. but in the end it is also true that after negotiations and sequestering 26 at aaron preus air force base in weekend retreat became a and the 11 day siege in the final negotiations put to rest towards the big eight that you are going to hear from. today along with speaker foley and sununu and treasury secretary brady budget director donnelly and house majority leader gephardt, house minority leader michael put the final agreement together in just days before the massive sequester was hit. as i look back at the history of the question it came down to

something familiar today a tax issue, a tax raise issue. president bush wanted to lower the capitol gains tax in the congress and would go along only if there were higher rates in the house minority leader said no, the price is too high. democrats retreated on the higher tax rates saddling on the limitation of the tax deductions for the wealthy. ..

agreement takes leadership and comprise and a willingness to risk one's possible political future for the good of the country. if there's no willingness to do that, there is no willingness to save the country. that is not changed. in over a quarter of a century. indeed the more i read, i think i'm prepared to say it has not changed since the founding of the republican. thank you very much. to the comment to those putting this together, i think it's the right time. don't let it get away from you. we have to get it put together as historical document now you'll never get it. there's a chance the nation will have a tumultuous financial future. thank you.

>> thank you, mr. chairman. i'd like to turn to representative i thought honestly, i apologize that you voted against the final reconciliation. you did not. you voted i was trying to get balance here. you voted for it. but i know you had some concerns, particularly as it relates as a chairman of the house appropriations committee at that time to some of the process items that governor. thank you. >> thank you i appreciate your asking. we were asked describing this conference what lead to the agreement, why was it defeated and what experience does it hold for today?

let me start saying i agree can the comment about president bush. i think he will go down in history as a significantly underrated president because he did a number of crucial things. first of all, the way he celt with -- dealt with the innovation of kuwait, he involved virtually everybody in reach and it became less contentious. >> if i can interrupt, i can say it's my understanding we made money on the war. [laughter] >> yes, that's supposed to acknowledge that. [laughter] secondly, in the middle east in general, the president showed a good deal of courage to move the peace process forward. and then thirdly, of course, the budget. because that agreement did put us on the road to a reduced deficit and the job was finished

in the next clinton administration. i don't think you can understands the deal unless you understand the context in which the deal was made. i think we have to remember that the deal came after we had a lot of experience with the inflated economic assumptions, which had been used to pass the reagan budget in '81 and after three failed attempts to fix the deficit with procedural fixes, and after all of that, we finally wound up with something that began to work. ting also shows a necessity to have realistic expectations about what your policy is going do. i have an old chart, which you

probably can't see in the back of the room, but this is a -- chart left over from the 1990 debate, and what it shows the blue lines show the deficit expectations under the -- between 1985 and '90. the green line shows what resulted. and what if shows is we started without a deficit of $172 billion. it was supposed to go to zero by 1990, instead it was it was at $2 20 billion by 1990. that's . >> point number one. point number two, if you are taking a lock at the broader context in which this debate took place, this chart shows what is happened to family income during the previous more

than two decades from 1950 to 1978 as this chart was shown regardless where you stood on the income scale. this country's family income was growing together virtually every group at a significant increase. in fact the lowest 20 percent of the people by income actually had done somewhat better over the time period than the rest. in contrast from 1979 to 1989, the year that took place, this chart demonstrates what happened to the nation's share of income by income group. you can see there was a huge increase on the top end. and i would submit that that is one of the reasons why the first budget deal went down. if -- i remember when they

brought the budget deal out from the committee. this chart shows the -- and this also is left over from 1990, this chart shows what by various income groups what the increased tax burden was on the initial budget deal. that went down. the bottom chart shows what the impact was by category of the deal that did pass. , and i think what it shows is that the initial budget deal did not reflect the resentment in the country that they had about what happened to family income, and the second agreement, which was passed did add accurately

reflect what had happened over the previous decade and a response to those events in a way that is seen as being more fair. i -- and i would say that we also need to remember one thing, when president bush signed that package, he really did contribute significantly to his own defeat in the election, and i would point out that years later when president clinton signed his budget deal, the democrats were were also rewarded by the loss of control in the house of representatives. so i think it demonstrates that if you do the right thing, you better not count on getting thanked for it because that's not the way politics works.

i would also say that in terms of -- well, i should say that the reason the first budget deal went down is because newt gingrich opposed it on the republican side because it had taxes and george miller and byron dorgan and i organized an democratic opposition. we did not like the impact on different income groups of that package. and after the first package went down, i recall sitting in a deserted room with byron dorgan using a large tablet of paper on an's l -- easel showing dpircht options to turn it to a more progressive package. in fact while dan certainly didn't want to do that in the end, he recognized that the center of gravity was not where he thought it had been on the

first package. so i voted for the final passage, but i certainly did not vote for the first passage, i mean, the first package, and i have to tell you we talk about tom foley i have never seen him more mad than he was at george miller an me when we voted against him. i said in caucus, i said i don't know if you know it or not, the speaker has a glass eye. if you look at the speaker, when he is really angry as he is right now at us, when you look at him, you can tell which one is the glass eye. in that eye there's a touch of human kindness. [laughter] so it was a very hot caucus. the other point i would simply

make is that i think we are better off as smaller deals that are achievable than larger deals that overpromise and can't deliver. i for instance don't believe that i would define success by whether or not the negotiators today can achieve a balance bucket. if you can get the deficit down to a low enough percentage of gdp so it is not growing as fast as the economy over time that is a highly acceptable result as far as i'm concerned. and secondly, i would simply point out because revenues are the main bone of contention, i think, i would simply point out that it would be good to remember that in the past forty years we have never achieved a balanced budget in this country

except when revenues were equal to at least 19.8% of gdp. and i think there's a lesson in there for anybody who wants to learn it. i've got some other observations, i would rare wait with them. >> thank you very much, mr. chairman. congressman frenzel you were the ranking member on the committee. you gave me a comment when i asked you to participate when you were in the minority in the minority but you did vote for the final package. i don't recall if you voted for the first package. i assume you did. welcome and thank you for your willingness to share your memories of that agreement. >> thank you. all the sponsors here, i'm honored to be sitting in a nice senator's seat with the

luminaries who work so hard on that adventure, and first i think i ought to say that i subscribe to the ssununu theory i think he outlined it to according to my rex. when he got done i said it was pretty good except he was too easy on newt. >> it's my charm. [laughter] >> i have some comments, but we all look at the thing a u little differently depending on where we sat. because i sat at the lowest rung on the ladder. my perceptions of what happened are probably, undoubtly, are going to be less valuable than the other people that sat

there. but i look at the differences between now and 1990, and we have the divided government, we had it then. 1990 was easier because as big often points out, we didn't have that debt ratio weighing on us. we had significant deficit, of course, but the long-term looked possible if we could solve the short term problems. that was different, and easier.e competitive, but they were not polarized as they are today. those days the bad guys were the opposition. today they are the enemy, and there is a world of difference between those two words. yes, we had some distrust, but

also we had some ability to work with each other and believe each other, and made life easier at that time. there were other divisions in the congress -- the party polarization today tends to make it republicans versus democrats all the way. there were other self-factions in those days, but budget tier versus the brokers, et. cetera, that cut across some of the party lines. the most important difference in my judgment, however was that there was less outside pressure on the negotiators from radio and tv extremists, lobbiest, poor constituencies, users of the social media, et. cetera.

mostly the negotiators labored in blissful anonymity. they got plenty of press but they didn't get 500 e-mails every minute in their office, and they didn't have people featuring them on tv and crucifying them with regularity. i want to -- i don't want to stay at it too long. for me there were lessons in both much these. one is that in budget matters, never rely on regular order. it doesn't work. an agreement takes -- when everybody has a veto, nothing gets done. the agreement such as was forged? 1990 takes both leadership and followership. we credit all the leaders and we know who they were. you also have to give some credit to those who followed and

as john john -- john iskander pt there were those that did not follow. they altered the ultimate form of the particular agreement. you need to appoint a few people to do the negotiating, let them be the leader, and hope that others follow. as a minority house negotiators, i believe that by single most important contribution to that agreement in 1990 was that i did not get in the way of anybody doing important things. if the final negotiations have to be done at the top, and they have to have some support as john pointed out. the republican support fell apart in the house it's a kind of interesting insight, i would mention there's a suspicious that that may be again this

year. that house negotiators may not have the full support on the republican side as we didn't have in 1990. i think john was right about the opposition bubbling up pretty much at the end of the process, and i really not a perceptive fellow, it didn't occur to me until -- perhaps a week before the first vote came up that we were getting in to trouble and that we had a lot of falling off. another rule for me is that the deadlines are crucial. without them, the negotiates never end. i thought six months was much too long in 1990, but hell, we're in the fourth year now, and -- and getting nowhere.

i suppose one advantage this year is the fiscal cliff is a deadline, it's a dire disastrous deadline. something is going have to be done whether it's the right thing, whether it's as good as' 90 or not, i don't know. another rule for me is ignore the outsiders. don't give the core constituency of the lobbyist much time, and they're going always be mad at you. get the job done as quickly as you can under the rules before the extremists turn up pressure. i guess another rule for me is if you turn down a responsible deal, you'll get a worse one. that's exactly what happened with john and me in 1990. republicans in the house knew that they were going sentence themselves to a worse deal, they currently were perfectly willing

to let that happen. turned out to be a better deal for david, congratulations. [laughter] and the worse one for us. another thought that i learned from david a long time ago is no deal is perfect. even the deal that we republicans thought wasless good in 1990, did help lead to the clinton surpluses a few years later. any kind of a good deal is going to be disliked by everybody as speakers have already pointed out. those who vote for it, are likely to lose their jobs. i would urge them to do so anyway because even a recession, there's probably better work out there than you need in congress anyway. >> thank you. thank you, congressman.

we have been joined by speaker foley. he has suggested that the pressure put on his office that you go, and he'd like to hear your comments. bob, we're turning it over to you. >> okay. thank you. it's a pleasure to be with this distinguished group and also with others to be up here speaking to you rather than down there being spoken at. which happened many times. i thought i would say a few words about three different dimensions of this. first the difference in the pressure of the reach of the agreement now versus then. as bill and tom pointed out, the political and media environments are much more hazard use today than they were then for all the reasons they have laid out.

as bill and many others have pointed out, the sequestration sword that was hanging over the nation in 1990 was much more serious. it was three times more than three times as great as the sequestration percentage cuts that we are looking at on january 2nd. third, the initial bush budget for the fiscal year 1991, was based on quite unrealistic economic assumptions and failed to include anywhere near enough money for the savings and loan bailout, the rtc, and others all the became revealed during the spring of 1990. the economy was beginning to

falter during the spring, and interest rates were rising. it's interesting to think about that a little. right now federal reserve policy basically has insulated us from one of the major consequences of fiscal irresponsibility. interest rates began to rise people in the housing industry, people selling durable consumer goods, stuff bought on credit immediately begin to -- right now we have none of that. and really for the average american out in des moines or where ever, the consequences of our fiscal irresponsibility are not great. you can feel badly that the country has huge deficit and is unwilling to sort of live within the means, but in your

day-to-day life, what you're worried about more is do i have a job, you aren't worried about inflation. it's low. one of the great signaling device that gets the people behind the leaders in trying to tighten our belts is missing as many people have said, you know, the attention that the nation was not one of the topic particularly after august 2nd when iraq had invaded kuwait. by the 10*9 of august we had deployed navel assets to the area as well as air assets in september and october the president was getting together a coalition to invade iraq and at the peak we had over 700,000

american troops in that part of the world. sure, we have some uncertainties in the middle east right now, we have conflict going on, but there was an exploding issue, which absorbed the tension away from this fiscal problem. and lastly, the white house was in the hands of the republicans. congress was both houses were led by democrats. the failure within congress was clearly going to be one party's responsibility. right now the situation is uncertain. also, you know, those in charge of congress worried about congress' reputation and how the american people viewed it. where we are right now has a baseline for how americans feel about congress.

it's not much further down to be. that's different. reaching the deal, it was easy? the answer, as many people pointed out. no it wasn't. it was long, it was arduous, it was a lot of time it was wasted. the effort began in early may when the president brought the leaders together and said, you know, we have to solve this, and there were then months of meetings in the senate side where 26 principles were participating, and when you have 26 principles you have several multiple of that in staff, and my view, having been staffed is that that slows down agreements. any good staff member should be able to provide ten reasons why john sue knew knew's latest proposal is lacking and dire

ability. this process went on and on and on. and didn't progress very far at all. , i mean, it was education for people who weren't steeped in the budget. [inaudible] and others were, but, you know, there was very little progress. we then went out to andrews and if anything, the situation was worse. i have my authorizization access from the andrews summit, which i didn't realize i had until the tree fell on our house in sandy, my wife went to the attic to clear it out so the guys could put a new roof on, she said what are you saving this stuff for? [laughter] and i looked and i thought, this is what i'm saving it for. [laughter] and my number is 108, and, you

know, i wasn't the lowest ranking person there. and so, you know, it was a room where good food was consumed as people have already mentioned, but there was a whole lot of staff on and on until 2:00 at night sometimes, and very little, you know, happening in the way of progress until much smaller group the eight people largely without staff met and speaker follow foley's officers. there was an agreement reached in which -- as pointed out the hurdle half way down the track and was a symbol of progress. that progress in part was the

result of misjudgment, i think, on the part of some important players. here i would say senator byrd was convinced that the caps that were part of the agreement and insisted upon by dick weren't going to work. they were modest the first couple of years the view was. it wouldn't stick for a long period of time. so we could sign on to that. ..

was the most significant component of our decade-long have heard to finally achieve balanced budget and a surplus. well, for one thing, in historic terms to caps that were placed on discretionary spending were not to talk relative to what we are looking at and talking about now. the initial ones were to keep discretionary spending in real terms constant, you know, let

them grow with inflation. it is a whole lot different from anything anybody has on the agenda right now. in fact, domestic discretionary spending rose in real terms every year between 1990 and 2000 except for one year when it was just a billion dollars, but it went not continually an essay% of gdp, gross or 1990 to 1995 steadily and that was of course because of various emergency or other escape files were taken advantage of. but the most important thing inserted the unsung hero of the 1990 agreement israeli mikhail

gorbachev because the soviet union fell apart during this period. in the spending, discretionary spending control with all of defense side. we went from 5.2% of gdp in defense down to 4% by 95. by 2000 we were at 3% gdp and of course this was justified by the fact the evil empire was there to justify the large defense establishment. had that not happened, this might be judged by history in a very different way and how it is now judged. third, alan greenspan is a big player in this in the sense that as the budget under control, he

assured us of the monetary policy and interest rates drifted down. as of lots of different things, and which we had the longest, most robust expansion of our economy in american history, which caused revenues to rise very briskly in part because we have reused income taxes on the wealthiest americans at a time we just raise the marginal rates for those individuals. so is a confluence of both these factors that got us from deficit, not in gdp terms, the dollar terms to four years budget surpluses at the end of the decade. none of that would've happened without the leadership of

president bush and the leadership of the congress to realize their reputations in the institution was on the line and they came through. >> thank you very much, bob. mr. speaker, i think we'll give you you the last word, but before we give you the last word, we have representation from dick durbin's office to the extent we can say that. so i'm going to let very and then let you wrap it up for us, okay? >> i never had the worst insult in my life. in any case, my number, bob, was one-to-one. why? because they printed on the shirt. [inaudible]

[laughter] a year ago after the success of the super committee -- i meant the failure of the super committee. i started getting phone calls from the bipartisan policy center specifically with respect to the sequestering specifically with respect to defend sequester, the reason being for that is the last sequester he had come in fact the only sequester we had under the budget enforcement act was done in early 1991 and it was done by organized and led by people at omb, the budget director, who's passed away, the general counsel has passed away and me who spent a repeat for the last 20 years. in any case, i started getting questions about how one implements the sequester.

when i was asked to appear on this, either the conduct to see what information i had from 1990 and 1991 and basically it was this. this is a tombstone that he had a wall street notice of an agreement prepared maybe five or six of them done for me in a couple of the other stuff. this i had in my desk's 1990 for the last 22 years and i've been a lot of places since then and inevitably people come up and say what is not? suggest you read something, it's this u.s. government 492 -- a billion dollars and details at the bottom is initiated by the president of the united states at the bipartisan congressional

leadership. the others then served as adviser, negotiator and executor budget. i'm proud to have this and i can tell you he never worked harder for anything in my life than this piece of plastic. in any case, but so far has been on the policies. i was very much of a process by and in that sense i want to talk about from a process to two different things. context, precedent and value. it's already been mentioned the fact that we didn't have laptops and cell phones. i don't remember, governor sununu refers to playing this. i think i think it was in june we started cleaning to get away. when we started discussing different options, i don't think interest was first from the dangers quickly developed as a very good option because of the military police under control

and we had control of who got in didn't been number 101 or whatever. number two, working at omb -- go ahead. >> let me have the primary consideration would get away from the press. >> yet come exactly. by control everything that the press. you could get away from it. the other thing i wanted to mention was there were no cell phones than. at omb, we were able to give estimates of policy options almost like that. we can. we can work with treasury, but we're able to give estimates. he turned to me and said i want you to build it up and stick it being very scared at what am i to do? setup and accelerate omb out there? he said yes. for the next several weeks that

computers so omb staff, off 800 stay at the executive office building. i had one other privateering communicated. so i said you want us to do that? how about cbo? he was not interested in helping dbo appeared and i went further. i setup a treasury? help them out if they need help, too. but the ac has been able to go out there, away from the media so the response it is one of the reasons why it was extremely demanding for me. the second thing i want to talk about was precedent. it's been mentioned here, but getting away from the media come again into small groups, the gentleman on the right have much experience and i, but i feel you don't get to an agreement with 535. you don't get there even with 26. you basically get to agreements

only with a very small numbers of people. bob was mentioning another's mentioned the importance of senator byrd played on this. the agreement between senator byrd speaking for the administration eventually got down to that, the two of them discussing with others. i say that because it is just mentioned on the caps on a quick anecdote on the caps. the numbers were 91 in maybe two or five tooth and nail and those numbers are there appeared asking for 93, 94, 95. first off remember this is budget authority and only the second its second welcome and 91 and 92 or three different categories. bullfight bochum international affairs and 93 which is one category. so he was busy with other things and cisco workout numbers for 93

to 95. he bought me to work them out? get the best deal you can. i've got to do other things. so we went to my office i said jim, okay, what numbers with the chairman want for 93 through 95? to repeat what i've just said, the chairman doesn't care. i said what? he said the chairman is fully committed that president bush will be defeated in the 92 election and therefore the numbers we put in the agreement for 93, 94 and 95 won't matter. i looked at him and said how about straight-line? he said could. but peck said i really thought for those. it was tough. i think i deserve an award, but a straight and numbers for 93 to 95. he said great. what happened? the chairman was right, bush is not reelected.

bill quick and came leon panetta was 90 boss. the president wants to know how to break these numbers. i said you can do it. we wrote the law, we can write the law. he was not able to do that, but what he was able to do is to figure sightedness because there is just one cap for all spend a common defense spending went way down on defense discretionary but way up in the caps. i called this term is revenge because of the response to become numbers in total were actually held. yes, there were some small amounts, but the numbers help with the distribution between the number or spirit to get away from the press, to get a waiver going to have to do it now just as we did then. essentially we are coming to an agreement with president obama and speaker boehner. whatever can be done now to get

to that process, the sooner we get there, the better off we'll be. but we get there before the new year's? i don't know. the one reason addicted to the packets that process helped us get to an agreement where we had up and down some problems, but we eventually got there. that is the precedent that should be taken. my last point is value. what the dark side of the joint cbo for four and half years and then let cbo. for most of the past 10 years have been in the international budgeting community and a lot to say that particularly to the gentleman on my right, there is a tremendous value that is not recognized here in the u.s. value is as is pointed out the spending caps. the spending caps, let me make sure -- is picked expenditures. that has served as the precedent

for a number of countries who have had successful fiscal and economic experience since. they include sweden, number one. they include space. they just instituted kinko's holland, chile, finland. it does not include the european union. the european union is still on grim redmond and they're suffering from it. i don't think the situation in greece would be a significant asset is now if they had moved to the bea as we did. it was a tremendous success. it's been a precedent for other countries. i hope the european union gets there. i was just in berlin last week testifying mostly about a german

cbo, but look what we did in 1990. look at the significance and how import was. i hope to go there. the agreements in terms of tax increases in entitlement cut. i hope we go back to something along the lines of the budget enforcement act. at last come into super several others. under the principles i've learned in washing in is no good deed goes unpunished. unfortunately, that's very true of budgetary taxes. >> thank you very much, dairy. mr. speaker, before your prize, we commented on the fact that at the end of what was dubbed in the press as the big eight. we had one quarter of the big eight here this morning in the

form of view and governor sununu. thank you for your willingness to come here. we appreciate any comment before we close. >> thank you very much. it's a pleasure to see many of you again. [inaudible] i think that were facing a much tougher and more difficult government than we did in 1990. one of the things that i think we had in 1990 that we are missing today is not only bipartisan -- [inaudible] -- the trans-partisan. they have members of both parties who have members that

were anxious to step forward and in doing so to dismiss in a way. i don't want to get to in detail. one member saying don't ring this back. we have people in the senate whose only purpose is to destroy the agreement. as a matter of fact the center agreement with smaller in their achievement was -- [inaudible]

we thought they'd recommend this at one point. that's exactly ray. so, i'm not sure what our next step should be in the process of trying to define the agreement. i think the example of 1990 was the bipartisanship is a trans-regaining. i also say that i thought they had several value. not so much from lobbyists -- [inaudible] i am not the best critical of the time, but most of the time. they have a purpose not to come

to an agreement to value the price is promoting a logo to anyone of us and say did you hear what he said? and then, to have any comments? they go back to john and say, do you know what so-and-so said about you? pretty soon -- i hope you can find some thing. i don't know whether the common andries had a special value. that gave the eight with a four

chance to act. i just seem to think back on the events of those days. [inaudible] now we can all make alternative movements and other decisions that were made then and we thought of at that time.

also, he was an extraordinary celebrity of his time. -- [inaudible] in fact, one permanent ambassador was told [inaudible] but i think he was a figure most of us will never forget. and i don't know if we have

respect -- in any case, i welcome all the efforts you can make because if we do not, i fear for the consequence. one of the senators in the state of washington, patty murray has just as we just let it happen. i think the consequence is our uncertain and highly dangerous. i'm glad to see you out. i commend you this will not succeed on the basis of how much effort they are willing to make.

>> the president, the congress and others. interested parties. i want to say word of congratulations i hope you feel after the conclusion of these meetings that it was worth it. as many of you know, bob reischauer is the son of a very, very distinguished ambassador and didn't know father. you missed an opportunity of real merit.

i think the best japanese speaker when i was in japan i was put on the same program with ambassador reischauer. he spoke just needs. the newest sun cheer myself conversing with ambassador reischauer when he went to the airport to the commentary 6000

japanese doing to the airport. and within any other ambassador in my experience. while he was in japan, ambassador reischauer was attacked by some left-wing japanese. was he regained -- do you remember? [inaudible] [inaudible]

[inaudible] we are church resting little bit. i think the reischauer family is a great, great contribution to the general welfare of our country. but the japanese were so embarrassed about the attack on ambassador reischauer that they assigned special japanese police to protect us. they did it with me first and then the israeli embassy in russia's refusal, the chinese refusal. it was an interesting experience

. thank you pay much for inviting me. >> governor sununu. >> like to just add something to with the speaker has just pointed out. the climate really was different at that time. this is not a big piece of legislation we were very hard on on a bipartisan atheist. we passed the clean air bill, which had been languishing for over a decade. we passed an americans with disabilities, which is extremely difficult. we passed the civil rights bill. said there was a precedent in terms of cooperation and climate. as representatives obey pointed out later on, that is manifested in what was brilliant on precedented interaction between the white house and congress on dealing the invasion to kuwait

and tried to pull together a unified respect you. it was an accidental. i really believe we work awfully hard in order to maintain. the keyword was the fact that tom foley and president bush have been members of congress to get there. they had developed a personal relationship. other members of congress, including dave and raskin kautsky had been there. when the president was in the house there were personal relationships that we were in the nascent authority exploited as much as possible in order to maintain the comedy on the process. we were commenting on dick darman. dick was from our perspective the heart and soul of the details of the process and barry

and others have been talking about the budget enforcement act. wanamaker stays in the days in the white house and 89 as the new chief of staff came to me talking about the fact that gramm-rudman hollings was really not working well, that there was a difficult situation coming forward in terms of timing and it was really in early may 1889 in the office and the white house about looking for an opportunity to recommend a replacement for gramm-rudman hollings and that became the bea. i have two kids dick credit for being way ahead of the process. >> and the interest of time, i have two questions in networking for the bipartisan policy.

i want to make a bipartisan. so with some trepidation, governor sununu, can i say as we discussed conservatives republicans, gingrich, dick armey opposed the agreement only to the end. but to the final vote and they voted against it in the final vote also. the question i guess to you were to senator domenici, congressman frenzel from republican perspective. do you think the 1990 budget agreement launched what might be thought of as a new republican party and its more brightwork turn sent quite

>> now, i actually don't. i think there was always in my lifetime starting back with ronald reagan is strong component of conservatives in congress. we can even go back a little further into the task days. so there is always the internal divisions within parties. there's always the internal divisions within parties. as i said in my opening remarks come you have to read the political differences between philosophies, parties in the detailed political differences within the parties when you negotiate this kind of an agreement. and we thought we had set up a process in which they were all those slices on our site if you will, were involved on a daily

basis, communicated with on a daily basis i'm part of every compromise we took every step of the way. brinkley as i sat back on this, i will stand on it again. we had an agreement on the republican side amongst republican participants in negotiations including newt gingrich and those who have mentioned, who she was communicating back to you. unfortunately at some point there, after we announced this agreement, they began to have second thoughts. and as frenzel pointed out, the perspectives of those then you would have had earlier. i think you're going to see this all the time. the hardest time i had governor in new hampshire was when i have

an effect is that republicans and 75% republicans in the senate. you learn to deal with it enough that they. it's part of the process. it's never going to change. is always going to be there and some form or other nba tickets somehow this is new is just mistaken. >> thank you very much. i guess in the manner of bipartisanship, speaker foley come before you arrived, it was pointed out some of the democrats in your caucus felt very strongly about the regressive taxes on gasoline, alcohol, cigarettes along with the medicare and pension reductions in fact, it to you right, representatives ob was one of those so i understand what the initial agreement.

mary mcgrory wrote in the "washington post" on october 9 at your caucus, she said you had collaborated with the enemy. i guess i would ask you, mr. speaker, who the enemy was, indeed you? >> i don't think i want to declare who the enemy was, but we wound up without too many. i think the broad benefit agreement finally had some effect on the individual difficulties themselves that you mentioned. and i think it is true that personal relationship have a

constant. from the days of working with dave who had distinguished career in the house and thought very hard. when you're able to go to somebody on the basis of personal relationship of the efforts i think it helps. i do have a very good relationship. and felt very comfortable in talking with him about any matter relating. and honestly i think that it held and made a difference for

everyone. the republicans, the republican president. i was a democrat and together type inquiry made a difference. i don't think with anything like it. i'm not going to pass judgment, but there are great differences today than they were in the mad. >> mr. chairman. >> money comment just a moment on this issue >> two minutes. >> i think while it is being spoken here that it's good to have a personal relationship. i will come down to the legislative year in the congress and it's very good to have fellowships and members in the

body that our friends. it seems we've gotten to the point where everybody goes home and everybody splits in their third few friends left. when i would hear sponsorship, those can be traced through friendships. when i got a big bill, i got a democrat to go with me and people can trace the next time i got so-and-so and i went to the house and got some videos. that is needed now more than ever as we try to solve some of these problems. but i don't know that we can build that. it's going to have to come back some way. >> thank you, mr. chairman. a major say, ambassador foley, speaker foley commute to really complement ambassador reischauer and rob reischauer discreet servants. i think all of your great public servants. we thank you very much or taken

the time to get what they said reflected in 1890 budget agreement. thank you i'll turn back to paula. let's get some applause. [applause] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> okay. first of all, before we get started on to recognize a couple people instrumental in pulling this together. he will be writing up a

narrative on the event, kind of looking at what lessons we learned from the 1990 senate floor today. so steve will be with us at this project. staff director some budget commissions and the plague. also come house in grant with the bipartisan policy center. i want to recognize and thank them. we call this session, listened for the next, which is presumptuous on our very part, but we note each generation seems to be in crisis. there's a tiny moment to overcome the centrifugal forces to is harder, budget. our moment arrives with the fiscal cliff. we unlike greece and other countries don't have market to remind us we have to do heavy lifting. we have her own self-imposed handcuffs, which we can always

pray, by the way, and we have. we know in 1990 we had a sequestered as bill hoagland said, but nonetheless substantial. $65 billion starting in january 13. with a range of tax cuts due to expire in a total purse of $560 billion swing in the deficit if we simply let the automatic sequesters go into effect and tax cuts turnoff and other spending go into effect or 3.7 percentage points of gdp. that is of course good news for a budget deficit upwards of a percent of gdp. it's bad news for an economy, so we may administer the treatment, but the patient may die. that's the challenge we're facing as leaders in a divided government setting that may have become even more polarized than in the years of 1990.

so those other kinds of questions we want to export today. we have different politics and get divided government all the same. so there's some similarities in different december 20 hear from wonderful people. to she talked about how i'll just go in order. on my immediate right is ron elving. a list and that's george mason adjunct professor. his day job is the senior washington editor of npr for a number of years. he's on top of the nation among other things in under his direction, npr's received numerous awards among many others was also the political editor of cq, "usa today" and has written numerous articles and books on the congress. next you had a jacqueline calmes come a national correspondent "the new york times" and hopefully should be reporting on this event.

hopefully, wishful thinking. she has been a longtime reporter bottom of "the new york times," but "the wall street journal" budget economic models, covering the white house and congress and work for cq herself earlier on. on her right is joe minarik, vice president for this economic. he's been at a number of budget event is a senior economist at the wind we are in the 1990s, during the clinton years and was the economists at the house budget committee was about the tax reform initiatives in the 80s and many other initiatives. to his right is michael graetz with columbia law school paper now and authored many books on tax policy, including death bypass in cut another things have gotten broad circulation.

michael is a true pain and outer from the academic world of washington policymaking and he was at the creation enemy to 90. he was secretary for tax dollars via treasury and had a key role to play in tax policy during that period. and finally, killjoys who is a college in the academic world.university of maryland, a senior budget or at naxal school and former cbo staffer, but most notably recently he did the first authoritative book on the congressional budget office. hard to believe an institution like that was around for that long and has never been written about to work on cbo among other things. he's also the editor of a major journal public budget and finance. so that's our lineup for today

and i thought it but everybody just take a broad take on the questions of what can we learn from the 1990 budget agreement that we all acknowledge is a policy success, even though maybe we didn't realize at the time. we learned president bush didn't quite get the budget he deserved. what can we learn today? >> first of all, but we say we and the media world have had or if you are spreading for the last hour and a half. we were called the degree to which all the criticism we may have heard in the last two and a half was well-deserved. forgive us our press passes is one of our colleagues years ago titled his book. it is our work and we do play a role analogous, but it's always

dynamic. those of you who've had an opportunity to spend any time in political cultures and societies around the world who do not have that dynamic re: skype to come back to govern in a country that does. going back to the budget agreement, i remember one day in the entire summer or year that we've just been reviewing this june 26 because i cut all night before the announcement was generally made from a staff member. i won't out my source even now 22 years later, but he was searching for a member of the house leadership and he said tomorrow the world is going to blow up because george h.w. bush is going to acknowledge is going to raise taxes. you may remember this is just two years after he stood before the republican in northern since the readme that's. no new taxes. you see clint eastwood was dominating republican conventions even then, at least having a hand about the remembered moments of the

convention. this was a big deal and it was a big deal because those of us in the media needed some kind of a handle on all these negotiations. we know to support these were talking in may. we need to group data that the white house was the serious people. dimensions of the problem, they were the biggest problem we had at that time, especially before we realized we were going to war in iraq. that particular summer, what we were looking out of the fiscal front was the biggest touring town. we were looking for wonky publications at congressional quarterly that no problem getting readers interested because they were the people who knew. but all the rest of the media really was the handle come in no way to get people interested at all these numbers. there was no way to make a personal for them. but there was an enormous drama

in plane of presidents reversal in being willing to consider tax increases. so that became worse for the president may have been the standpoint of democrats to move along to some degree is probably to some degree baked into the calculations of people in the republican side that was the president had publicly knowledge this need was for the democrat basically hauled it up to head until he was going to make a public announcement. i was going to dominate team and that was beyond which you could possibly imagine. the president saying from her brief my lips that summer, that fall into the next year and eventually into the presidential cycle 12 had a lot to do with prosperous challenge and

ultimately those challenges how does you should should do the downfall of church htb associates bill clinton did based on the estimation of myself and some of my colleagues and many people have thought about this a great deal. these are consequential events in the media is a critical role in how we focus on what reticular hinge in the history was cute deal. that was sacrificed the president aid. now you have to judge for yourselves whether or not the function of the media with analysis is ultimately deleterious to the process, ultimately a dynamic rss insert the understand why public officials like to get out of the press and the view of the camera and microphone occasionally to negotiate. but in the end, whatever they negotiate has to be made public and that's really when it hits the fan and would people react and ultimately democracy have to get everybody formed at least as

many people willing to be informed so they can take their part in the process as it goes forward. >> i told my editor yesterday i would be out in the morning to do this and i described it as discussion from the time of the lessons learned from the 1990 budget summit. he interrupted me and said get off the beat. here i have all these years later doing it again. i had been withdrawn in the early months of maneuvering after april when i had my first child. remember the last time i was in this room i had such a huge stomach and i was trying to make my way after they broke up to talk to senator domenici. and senator sasser got into the

mic and said make way for jackie so she can squeeze through. anyway, at that point he had hired me to work with "the wall street journal" and is sitting on the phone thinking he doesn't know that i can't reach my desk and i called david rogers committed some of you may know from budget story. sissy mr. craig but doesn't need you for formats. so how in his wisdom to need this thing would be maneuvering all summer long in simulator cooking after labor day, which is my first-ever job. i would have air force base and i was so glad that was the idea. maybe it was sent. but it didn't last long. as far as lessons learned, serious lessons learned, i just think i learned at that experience that both parties,

both sides have to want to deal. of course in getting a deal you have to make sure you don't completely force the other side if they're vulnerable to that. to the extent people might say president bush last faith, it is his own party they'll actually did it to him. and i've always thought so many times over the years i've heard people say his mistake was breaking his campaign promise. i respect his mistake was making that campaign promise. people may try to argue that you need to do that to get the nomination. you can argue that hypothetical forever. and the second lesson is the national/legislative leaders have to stand up to this and caucuses as hard as that is, the people then and now have their

own personal agenda within the institution for newt gingrich in 1990 for nationally perhaps paul ryan comes to mind now. so i remember back in that time and this is off the record at the time, but i know i can say it down because he said something like this publicly. but newt gingrich in late 89 had said to me that, you know, actually wouldn't be such a bad day if george h.w. bush was defeated in 1992 because he and his cohorts in the house, republican caucus could write a bit way the wind and an 1894 amid turns if history is any

judge, which of course they went on to do. i don't think even then he got majority, but he could get a big minority and in the meantime get up michael lappas house leader. so when you take a story about his prediction that george h.w. bush would probably lose the 92 together put on the previous panel there was a reference to bob byrd predict in the church htb bush wouldn't win in 92. he really and just what a risk to george h. duffy pushed back and what a statesman he was. i will come not quite the same, but midway into team. i covered the 2000 campaign of george w. bush and occasionally he would come back in the press section and more towards the last week or so he was just

heading back in two his cabinet in a sea this near the front. everyone else had had their fill of talking a spot within. i had one at this, so i took my moment to say, you know, the campaign is almost over. it may have been election night, but he said, you know, governor, this may be my last chance to bring this up. he said many times when you come back, you throw in a statement that history will look kindly on your father. as a journalist i just keep our mouth shut. but i thought i'd like at this moment tell you i think you're absolutely right, but i'm not sure you and i would agree on the reasons. he said, so what are your reasons? i said well, i was covering congress and he came right and brought to a close central

america so he could get on with the more domestic agenda and he cut deals on the amendment to the clean air and water, americans with disabilities act. the quick war in iraq. and i said, but last and certainly not these he signed the 1990 budget at that i think that this country in the path to persnickety we have today. and he lifted me inside, interesting. he was up to the front cabinet. a poster credit he didn't feel he could engage me on that. but as you well know, friends of dick darman and first president bush, you know, they were virtually wipe us out at the picture in that period of time, including by the first president bush's son, which i was that was sort of sad because i so come to

admire president george h.w. bush. so i'll just turn it over, but i do think i agree with everyone's that it's harder now, hard for me to see some thing coming together except for the fact that something has to happen. i feel a little more optimistic than i did i feel a little more optimistic than i did i feel a little more optimistic than i did i feel a little more optimistic than i did his. >> i just wanted to jump in. i forgot to mention the most important part of joe's revenue but is also an adjunct professor at george mason university. >> i was just about to correct you on that, paul. thank you, jackie. that was interesting. [laughter] never sat up here come especially in chairman's fee. this is pretty cool. let me try to give you -- at 12

lessons every down, but i should note at the outset was sirkin on the hill at the time. so these are outsiders observations. lesson number one, a budget summit is the worst way to proceed. i am aware of a number of people who participated in 1990 for that data from a fire and said never again. if you don't want to have a bipartisan budget summit number one, don't get as far away as we have. and number two, make sure you've got one per decoder. for someone who participated in the 1993 workings, the one-party government is no picnic. it's not easy to get all of your troops together when i feel

figure out they've got the balance of power and they can hold you up and ask for what they want. and that does happen. number two, bipartisanship is necessary except that you won't get anywhere without it. that's not only for the obvious reasons that we have divided government and therefore we need passage of the bill through both houses of congress plus a signature of the president. it's also because if you're trying to do something vague, the next political wave can undo it, unless you have the same 50 i'll, validation, protection and a partisan sense. i used to work for john spratt on the house budget committee when he was the ranking member in the early part of the decade of the two thousands. i remember we once did a budget markup and john stratton when it came time for his time to speak to the majority he's got the

vote. you can do absolutely anything you want. there's only one feed you have a dataset solution by which he meant he explained if you want to do something difficult, you got a big budget problem. if you want to do something toscanini to agreement on the other side of the aisle. i think one thing to defend the current environment was more obvious need some agreement, some recognition to have people holding hands before they jump. .3, the bond market vigilantes. i believe they are life and while. my concern is following. i think it was bob bixby of the coalition has said, we write now are like a consumer piling up interest ra